Dow Theorist: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

Joe Weisenthal May. 18, 2010, 8:57 AM

Image: US Army

WHOA!

Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

That's pretty intense!

Update: By popular demand, here's more on what he sees in the market:

And I ask myself, "Am I seeing things? The April 26 high for the Dow was 11205.03. The Dow is selling as write at 10557 down 648 points from its April high. If business is even better than expected, then why is the Dow down over 600 points? And why, if there were 674 new highs on the NYSE on April 26, were there only 20 new highs on Friday, May 14? And if my PTI was 6133 on April 26, why is it down 17 points since its April high?

The fact is that I've been seeing deterioration in the stock market ever since early-April, and this in the face of improving business news. The D-J Industrial Average is composed of 30 internationally known top-quality blue-chip stocks. These are 30 of "America's biggest companies." If Barron's is so bullish on the future of America's

In two tumultuous weeks in October 1987, the stock market shed nearly one-third of its value in perhaps the second most notorious crash in U.S. history. It could happen again. Don’t be deceived by the rebounding economy, any more than the bulls should have been misled by the balmy climate during the late Reagan years. Right now, stocks are extremely vulnerable to the same scenario. The reason: The market is even more overpriced than when thunder struck on that distant Black Monday.

That doesn’t mean that a giant correction is inevitable; far from it. But the quasi-bubble that followed the big selloff in late 2008 and early 2009 makes the probability of sudden downward swing far more likely. And today’s high prices make it practically certain that investors can, at best, expect extremely low returns in the years ahead.

106
posted on 05/18/2010 7:47:42 AM PDT
by SmartInsight
(Bad officials are elected by good citizens who do not vote. ~ G. J. Nathan)

Yeah, kinda pisses me off, I’m telling everyone to stock up on can goods. Do they? No, but if the stuff hits the fan they will all come over to my house. I’m having to buy way more then I should for the grass hoppers. Well they are going to pull garden gaurd duty if they want to eat. lol.

No, he’s telling me that it’s the counties and it’s for taxes ... he says that he gets them at the counties when they do their tax sales... if no one buys, then the country owns the property, themselves. If someone buys, then that person is the new owner.

But, I do remember the recent story about the returning vet who had his house sold out from under him for back dues on the HOA ... and that was a shame...

Actually, it’s a shame for all these people... as they’re sitting in about $100,000 house that someone else just walks in there and picks up for a few thousand.

The guy was telling me that he just goes up to the people and tells them, “If you want to stay, this is how much rent you’ll be paying now. Otherwise, get out in three days!” ... hoo-boy! ...

112
posted on 05/18/2010 7:49:21 AM PDT
by Star Traveler
(Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)

usgoldbuyers prices depends on the amount of gold. Example if under 5 toz they give 90 percent, 5 to 50 toz they give 95 percent, greater then 50 toz they give 98 percent. If bullionbypost gives 98 percent, I will check that out. Thanks for the info. Bottom line is do not go to jewelry stores, pawnshops and most TV advertised gold buyers.

recourse varies by state- liberal states usually offer chance for owners to redeem the lien, at a profit to the lien buyer

this happened to me several years back when the county sold my condo out from under me for a $55 sewer bill that was never delivered (nor any of the follow-on notices) because the tenant threw everything addressed to me in the trash

someone bought my condo for $300 lien (cost plus penalties), I had to pay about $500 to get it back, profit went to the lien scavenger, better that than the deed to my property!

Only way I found out was my property tax payment was returned because of the unpaid lien recorded on it, lucky I had time in redemption window to respond

That was interesting because it showed people dying off in the big cities, and many congregating in the smaller communities for self-protection. But, it certainly wasn't what I would call "living" -- because even in the "safe" areas (those smaller areas where people congregated together and cooperated for protection), it was more like a dictatorship by those who controlled the smaller areas. It wasn't like "gangs" but was peaceable and controlled, but not free and like we live today.

Personally I don't buy that view. It just seemed to me that it was an urbanite view of surviving among a bunch of gun toting racist rednecks in the country.

While much of the constitution would be abandoned in the short term, I think voting would still play a major part of our lives. Hard decisions would have to be made and punishments would be stiff but I have faith in my neighbors to remain human.

I live in a tiny town with several other small towns inside of a ten mile radius. The largest of those only has some 1500 residents. I suspect that these towns would link into some kind of cooperation pretty quickly. I suspect a fair number of useful urbanites would be accepted into the fold and the heavy Christian influence would at least help some who we wouldn't accept in.

135
posted on 05/18/2010 8:03:27 AM PDT
by cripplecreek
(Remember the River Raisin! (look it up))

Read or watch Harry Dent, the Great Depression Ahead (written 2008), I think he is on track with this one (even though someone always points out how he blew it with the Clinton stock market prediction)

recourse varies by state- liberal states usually offer chance for owners to redeem the lien, at a profit to the lien buyer

This guy, yesterday (and I've known him casually for a while, being that he owns one of the houses in the neighborhood that he rents out) -- he was saying that there used to be, in Oklahoma, a period of time for recourse, but that it's been changed now and that now they give him the deed (anywhere from right then to within 48 hours), and there's absolutely no recourse by law, for the former owner. He was quite emphatic about that to me (seems he made a big point of it, too ... LOL ...) -- in that "It's over! It's done, and there's nothing the previous owner can do about it!"

I'm not kidding... he got excited about that ... LOL ...

He was also saying that "This is a great time to make money!" (talking about picking up stuff like this at tax sales).

139
posted on 05/18/2010 8:06:08 AM PDT
by Star Traveler
(Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)

I did some googling on Richard Russell and found his recent address was 6104 Avenida Cresta, La Jolla, CA 92037, and he once contributed $500 to Robert Reich for Governor of Massachusetts. He sold his house in February for $3.6 million. He's getting into cash I see. He seems moderately rich for an old man, but I would guess he didn't become rich playing the stock market.

Greetings from Italy. Recommend the country highly. I am writing this on Saturday getting ready to fly back to the U.S.

“IF THEY DON’T STOP, EVENTUALLY THE MARKETS WILL MAKE THEM STOP!” This is a quote I have lived by for more than a couple of years. The meaning of the quote is simple. If governments around the world do not stop their outrageous spending leading to outrageous deficits, the markets will eventually stop them.

The markets stopped Bear Stearns, Lehman, Washington Mutual, Wachovia and Merrill Lynch...and almost stopped Citigroup and Bank of America. The markets are now working on countries, not just financial companies. I don’t need to tell you which countries. They are all in the news. They are mostly countries where one group of people believes they are entitled to other people’s money. Unfortunately, we are now seeing it in the good old USA as over 40% of wage earners do not pay taxes and now we have an administration and leadership that is determined to redistribute as much wealth as possible, while spending this country into oblivion.

This is a clear lack of respect for taxpayer dollars by politicians, who for the most part, have never run a lemonade stand. They can fool the voters but they cannot fool the markets. Eventually the markets will fight back and that is exactly what we are seeing right now.

Simply put, over the past couple of weeks, markets around the world have come under severe distribution. I do not believe the 1000 point day was real. I believe it was a huge bad trade...but that was resolved quickly. What has not been resolved is a market that for the most part has put in an important top. Very simply, the market’s technicals have been deteriorating quickly...and that’s in spite of last Monday’s 400 point gap to the upside.

For me, I think the probabilities are decently strong that the recent highs could be the highs of the cycle. The deterioration has been sudden and been strong...too much to ignore. Most sectors have topped. Most countries have topped...especially Hong Kong, China, Japan, the UK...and of course, Greece.

I can pretty much go on and on about all the sectors that have topped...all the stocks that have topped...and recently, the many leaders that have topped. The main point I want to make is that I do not think the action we are seeing is just a “reaction” to the news out of Europe...and will end quickly as so many are saying.

The only area that is actually emerging and showing relative strength here is GOLD/SILVER...and that’s probably not a good thing. It is the market yelling that using more debt to fix a debt problem ain’t going to work. Near term, the action is insane. We can bounce...we can go lower...but I am not worrying about the near term here.

Amazingly, governments around the world refuse to learn any lessons about balancing their checkbooks and think they can just spend their way out of trouble. It just doesn’t work that way. And while I have been away, I still kept in touch with what the politicos have been saying...and still see nothing on the horizon that tells me they get it. In fact, the one person that does get it, Governor Chris Christie of New Jersey, continues to be blasted by those that think the taxpayer is an unlimited well of money to be handed over to them.

Gary Kaltbaum is an investment adviser with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show “Investors Edge” on over 50 radio stations. Gary is also editor and publisher of “Gary Kaltbaum’s Trendwatch”... a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary’s Daily Market Alerts click here or call 888.484.8220 ext. 1. http://www.tradingmarkets.com/stocks/commentary/if-they-don-t-stop-eventually-the-markets-will-make-them-stop-951405.html

145
posted on 05/18/2010 8:14:17 AM PDT
by Matchett-PI
(Obama: "Let's Pursue Reparations Through Legislation Rather Than the Courts")

I think most people are waiting on the outcome of November to determine whether to go into full survival mode.

I think that there won't BE a November that all seem to count on. The monsters in the White house (they are monsters) - and those behind them - can't allow the kind of loss they're facing to occur. The moment that they understand that they can't intimidate or defraud their way out getting their asses handed to them in the voting booth, look out. They're on the cusp of achieving absolute power. Who is naive enough to think that little things like the rule of law and the Constitution are going to get in their way? These monsters are willing to spill oceans of blood and pile up mountains of corpses if that's what it's going to take. Their POV: better to rule in hell than to leave us alone.

150
posted on 05/18/2010 8:16:01 AM PDT
by Noumenon
("Upon what meat doth this our Caesar feed, that he has grown so great?" - Julius Caesar)

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